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Beyond cryptocurrencies, these days it seems that you can find blockchain almost anywhere, right? From the logistics of the elections to the protection of the intellectual property of musicians and bloggers, to the improvement of processes in clinics and hospitals, the applications of this new technology are numerous! Among so many such use cases, you wonder, would there be any related to retail?

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But of course! As you will discover in this article, many of the features that make blockchain so attractive to other industries are also relevant to supermarket chains – and may even change the way we consume different products. Did we get your interest in the topic? So stay tuned to this post to better understand how this new technology can be used for retail!

What are the biggest problems for retail currently?

The advancement of technology in recent decades, the complexity of supply, and new consumer habits have all contributed to changing the way retailers conduct their business. In this post, we are going to address the main problems currently faced by retail and point out how blockchain could help to solve them. Let’s go?

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“Woke” consumers, murky supply chains

Consumers are becoming increasingly “woke” and beginning to express concern about the origin of the products they buy. As a result, the market for organic products, fair trade (that followed ethical rules in their production, such as the payment of a decent wage for employees) or cruelty-free, (especially in the treatment of animals) expands every year.

This awareness is excellent, but it brings a small problem… It is virtually impossible to know whether manufacturers are telling the truth and really do behave ethically, or if they just want to take advantage of this movement – especially because these “woke” products tend to be more expensive than normal ones! How can you know if those fruits are really organic, or if the company that is responsible for the cosmetics you are going to buy actually didn’t do any tests on animals?

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The solution found by the market was the certifications. Producers who follow fair trade rules, for example, can obtain a license to use the Fair Trade Seal, issued by certifying institutions such as the FLO (Fairtrade Labeling Organizations International). Organic products follow a similar logic, and in Brazil, for example, they must be previously registered at the MAPA (Ministry of Agriculture, Livestock and Supply) and accredited by Inmetro (National Institute of Metrology, Standardization and Industrial Quality).

Sounds kind of complicated and bureaucratic, right? And it really is! To make matters worse, this is by no means the only problem currently facing retail.

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Difficulties in tracking the production

With very few exceptions, virtually everything we consume is produced in a long chain. Take the smartphone or computer on which you are reading this article now as an example. They contain parts from more than a dozen countries, are assembled in a factory (most likely in Asia), and from there shipped to the rest of the world.

Because of this, the current supply chains have become extremely intricate, with several producers and sub producers contributing to the final merchandise we buy. And, as you can imagine, managing these complex chains is definitely not a small task!

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This becomes especially serious when the product is defective. How to know exactly where in the chain the error occurred? If you go to a fast food chain and end up with food poisoning, for example, how can the management of the establishment be sure of which product was contaminated and how this contamination occurred in the first place?

Introducing blockchain for retail

Blockchain, a distributed and decentralized database in which information can stored in a linear and immutable way, is being seen as an interesting tool to reduce the problems faced by retail. This is because it can contribute to increasing transparency in supply chains, allowing consumers and companies to better monitor the product trajectory.

In the case of organic, fair trade or cruelty-free products, for example, it becomes possible for the customer to check their origin and to trace the production process, going beyond the mere checking of the certifications on the labels. Several startups have developed projects on this lance, such as Provenance, which uses blockchain to ensure that coconut farmers in Indonesia receive fair wages, and Everledger, which tracks diamonds to ensure they do not come from conflict zones (the so-called blood diamonds). Because the information stored in these systems can not be changed, the chance that fraud occurs in the middle of the path is reduced.

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For large companies, blockchain can help to automate the supply chain and streamline processes through the use of smart contracts, and also to optimize tracking. Several projects are already being developed for this purpose. Wallmart, in partnership with IBM, is testing the technology to track pork in China. This possibility of tracking is proving itself particularly interesting for sensitive industries, such as food and medicine, which need to follow the processes, both internal and third-party, to a maximum degree of accuracy.

So, did you enjoy discovering how the blockchain can lead to new consumption patterns for our society? With it, we now have the means to identify whether the information given by a company is really true, as well as to ensure that the product we consume has passed through a reliable and sustainable supply chain.